Low health-care costs in Massachusetts? How can that be? News articles say the state's spending per person is the country's highest. Gov. Patrick wants a crash program to lower the costs.

For the insights, we are indebted to Prof. John McDonough, a former state rep. from Jamaica Plain who has recycled himself as an academic, and to his collaborator Dr. Miguel Marino, also at the Harvard School of Public Health. They appeared November 7, 2011, in Prof. McDonough's regular column on the Globe's Health News pages. [ Does Massachusetts have the nation's highest health insurance premiums?, at http://www.boston.com/lifestyle/health/health_stew/2011/11/does_massachusetts_have_the_na.html ]

McDonough and Marino argue, contrary to promoters of so-called "market" approaches, that health care cannot meaningfully be treated as a commodity. Just because a physician's fee for a colonoscopy might be $350 in Montana instead of $500 in Massachusetts will not help, when you live in Massachusetts. As with many other services, for the most part you will get health-care services where you live, and their prices will vary with regional economies.

In place of raw totals of health-care spending, unadjusted for regional economies, McDonough and Marino look at total health-care spending as percents of total personal income, state-by-state. That measures impacts on people's everyday lives, the extents to which other needs and activities are likely to be compromised in order to afford health care.

On that measure of health-care spending, adjusted for personal incomes, instead of being the highest-priced state, Massachusetts is among the half dozen lowest-priced states. The others are Connecticut, Maryland, New Hampshire, New Jersey and Utah. Without taking state economies into account, Massachusetts falsely stood out because its income levels are generally high.

Although history-challenged Globe reporters seem unaware, Massachusetts has set up and sometimes abandoned one medical cost-control effort after another over the past 40 years. The early 1970s "certificate of need" requirements aimed to hold down proliferation of new hospital progams. They were soon exploited by bigger hospitals seeking to protect themselves from smaller competition. [A.E. Reider, J.R. Mason and L.H. Glantz, Certificate of need: the Massachusetts experience, American Journal of Law and Medicine 1(1):13-40, 1975]

Hospital rate-setting in the late 1970s disintegrated as emergency rooms started churning patients and hospitals laid off nursing staffs. HMO capitation in the 1980s became another failed experiment, producing massive rejection by health-care insurance subscribers. At one time or another, the state has experimented with almost every popular medical cost-control notion except the one that might work, single-payer care.

Gov. Patrick, his foolish advisers and a State House contingent bereft of insight are now embarked on a high risk, low return project to rein in costs of medical care. Unlike Congress, trying fitfully to restrain the growing cost of Medicare, they lack effective leverage. If the state tries to squeeze payments any more for Medicaid, a/k/a Commonwealth Care, the high proportion of state physicians who already refuse new Medicaid patients will skyrocket, and there will be hardly any physicians caring for low-income people.

Although history-challenged Globe reporters seem unaware, Massachusetts has set up and sometimes abandoned one medical cost-control effort after another over the past 40 years. The early 1970s "certificate of need" requirements aimed to hold down proliferation of new hospital progams. They were soon exploited by bigger hospitals seeking to protect themselves from smaller competition. [A.E. Reider, J.R. Mason and L.H. Glantz, Certificate of need: the Massachusetts experience, American Journal of Law and Medicine 1(1):13-40, 1975] Hospital rate-setting in the late 1970s disintegrated as emergency rooms started churning patients and hospitals laid off nursing staffs. HMO capitation in the 1980s became another failed experiment, producing massive rejection by health-care insurance subscribers. At one time or another, the state has experimented with almost every popular medical cost-control notion except the one that might work, single-payer care. Gov. Patrick, his foolish advisers and a State House contingent bereft of insight are now embarked on a high risk, low return project to rein in costs of medical care. Unlike Congress, trying fitfully to restrain the growing cost of Medicare, they lack effective leverage. If the state tries to squeeze payments any more for Medicaid, a/k/a Commonwealth Care, the high proportion of state physicians who already refuse new Medicaid patients will skyrocket, and there will be hardly any physicians caring for low-income people. In her latest press-release article on the mess, Liz Kowalczyk does not even mention powers that the state has available to enforce cost goals. Quite possibly that is because, despite her years of attention to this development, she really does not understand. If she did, it might be embarassing to describe a slipshod effort driven entirely by personal ambitions and public relations. [ Liz Kowalczyk, Legislative leaders reach compromise plan to control health care spending, Boston Globe, July 30, 2012, at http://www.boston.com/whitecoatnotes/2012/07/30/legislative-leaders-reach-compromise-plan-control-health-care-spending/9SREL4mSlDKKD1LbN3MmdI/story.html ]
Posted by AppDev

In business we use a model: cost, quality, speed. Logic holds that only two of the three are ever attainable, I.e. you can never attain all three.
The same holds for the health care debate. Cost, quality, access are the three metric upon which this discussion is being held. I maintain that you cannot attain all three simultaneously. The most efficient result wil be attained by the free market, as the relative weights of these metrics are actually determined by the users of the medical market,cand not the artificial restraints of government political goals.

Gotta love appdev for attacking me with no facts at the same time casting aspersions at others for fact collecting, while he exercises no real fact on his side. I mean, statistical analysis is what you put in FAR more than what you get out. That I learned 30 years ago in statisics. Far more studies using statistics are concluded before the data is even looked at, than the opposite.Oops I forgot to mention that Ronald Reagan basically banned the tax free shelter for donations to Hospitals in his 1985 raise the tax act that reversed his republican creedo. No longer were people with money able to shelter significant taxes from wills and familial tranfers at death with tens of millions to public hospitals. And just about that time came the for profit large hospitals. Coincidence? Not really just bad tax policy hurting the poor and benefiting the few. As to the notion that all is lost in medical cost control and there is no good plan and no one has ever done anything useful? I say it depends very strictly on the model. Fourty years ago the cost model included a totally different source of federal funds and cost for running hospitals and cost of fuel, electricity.... It is a very demanding task to compare cost measures from different decades. In the 70's plastic was cheap, I mean REALLY cheap compared to today even with inflation. How do I know? Because I was an assistant for cost accounting at a plastic molding company. The numbers on medicaid vs medicare were very different. The state portion of these costs was VERY different being that many states ran their own public healthcare clinics without federal dollars from medicaid. Then the block grant time period for public health and so many different funding environments that appdev pushing his singular cost expansion model is just fantasy over the previous four decades.As to offices that refuse Medicare patients. This has always been the case even fourty years ago. It has been complained about in newspapers and other outlets every year. The heart wrenching stories. Year in and year out and twice as much in an election year. But really the doctors that I have contact with in mass get paid faster with less paperwork from Medicare than ANY insurance company. Just talk to the office staff. While a cheap payback the office spends far less effort. AND that is a big boost to the doctors practice, compared to the private ins. co's.In Response to Does Massachusetts need more cost control?:

Although history-challenged Globe reporters seem unaware, Massachusetts has set up and sometimes abandoned one medical cost-control effort after another over the past 40 years. The early 1970s "certificate of need" requirements aimed to hold down proliferation of new hospital progams. They were soon exploited by bigger hospitals seeking to protect themselves from smaller competition. [A.E. Reider, J.R. Mason and L.H. Glantz, Certificate of need: the Massachusetts experience, American Journal of Law and Medicine 1(1):13-40, 1975] Hospital rate-setting in the late 1970s disintegrated as emergency rooms started churning patients and hospitals laid off nursing staffs. HMO capitation in the 1980s became another failed experiment, producing massive rejection by health-care insurance subscribers. At one time or another, the state has experimented with almost every popular medical cost-control notion except the one that might work, single-payer care. Gov. Patrick, his foolish advisers and a State House contingent bereft of insight are now embarked on a high risk, low return project to rein in costs of medical care. Unlike Congress, trying fitfully to restrain the growing cost of Medicare, they lack effective leverage. If the state tries to squeeze payments any more for Medicaid, a/k/a Commonwealth Care, the high proportion of state physicians who already refuse new Medicaid patients will skyrocket, and there will be hardly any physicians caring for low-income people. In her latest press-release article on the mess, Liz Kowalczyk does not even mention powers that the state has available to enforce cost goals. Quite possibly that is because, despite her years of attention to this development, she really does not understand. If she did, it might be embarassing to describe a slipshod effort driven entirely by personal ambitions and public relations. [ Liz Kowalczyk, Legislative leaders reach compromise plan to control health care spending, Boston Globe, July 30, 2012, at http://www.boston.com/whitecoatnotes/2012/07/30/legislative-leaders-reach-compromise-plan-control-health-care-spending/9SREL4mSlDKKD1LbN3MmdI/story.html ]Posted by AppDev

Reader "topaz978" notwithstanding, surprisingly little has changed in the decades-long trends of medical cost-inflation. Willingness to read laws, regulations and reports will help much more to understand than any abstract knowledge one might encounter in schools. Reader "skeeter20" repeats political canards that any careful reading of history show to be false. As several economists have documented, health-care has never behaved like a market, mainly because those who need services (that is, most of us) lack the detailed knowledge and the opportunities for bargaining that would create a market. The usual government approach to cost-control began with and remains tinkering with payment methods, in the foolish hope that provider organizations could be manipulated. The invariable result is that they quickly learn to game the system.

It has long been obvious that without direct intervention--taking over provider organizations--the state lacks leverage to control medical costs. Without so much posturing, other practical tactics have been well explored by other states, but all they accomplished to was wreck Medicaid, so that people who qualify go to emergency rooms. Either the Globe reporters who cover medical finance are less capable than they appear, or else--as usual--management laid down rules about what they can report, not including the truth. However, according to the NY Times today, the recent state efforts have no chance of working: "a new commission would monitor the growth in health costs...[but] the bill contains no real penalty for missing the targets." [ Abby Goodnough, Massachusetts aims to cut growth of its health costs, New York Times, August 1, 2012, at http://www.nytimes.com/2012/08/01/health/policy/vote-looms-in-massachusetts-on-bill-to-limit-health-care-costs.html ]

Two of the key people you might have thought would have much interest in recent efforts to develop medical cost-control in the state, now 3-years-running, have had little to say about it. Prof. John McDonough of the Harvard School of Public Health is a former state representative from Jamaica Plain who was involved in the Dukakis "universal health-care" campaign of 1988, its subsequent breakdown and its cancellation a few years later. So far, he has had little to say about the recent efforts in his Health Stew column--published by the Globe since November, 2011--never once dealing with the state's tangled, often failed history of medical cost-controls and ways that the recent efforts might improve on them or repeat their mistakes.

Likewise, little has been heard in the past two years from Prof. Alan Sager, director of the Health Reform Program at the Boston University School of Public Health. Before mid-2010, he published several exposes of wasteful medical spending in the state. However, his most recent survey of problems and opportunities was over six years ago. In it, he argued for a cost-control effort based on "honest conversations with our state's 22,000 active patient-care physicians." Those physicians have been almost entirely excluded from the state's recent efforts. [ Alan Sager and Deborah Socolar, Why are Massachusetts health-care costs soaring?, Municipal Advocate 22(1):11-15,34, Massachusetts Municipal Association, 2005, at http://www.mma.org/resources-mainmenu-182/doc_download/80-why-are-massachusetts-health-care-costs-soaring ]

Perhaps Globe reporters who cover medical finance are less capable than they appear. More likely, as the long-term readers have often seen, politically biased management laid down rules about what they can report, not including the truth. Anxious state legislators, stumbling and bumbling around the issues just like a lame-duck governor who has signed out on another term, bought into the governor's non-solution. If he finds out Partners and Brigham have been misbehaving, he will tell the Attorney General on them. Naughty boys!